Business and Organization
Bergio International, Inc. (the Company) was incorporated in the State of Delaware on July 24, 2007 under the name Alba Mineral Exploration, Inc. On October 21, 2009, as a result of a Share Exchange Agreement, the corporations name was changed to Bergio International, Inc. The Company is engaged in the product design, manufacturing, distribution of fine jewelry primarily in the United States and is headquartered in Fairfield, New Jersey. The Company also two retail stores located in Closter, NJ and Atlantic City, NJ. The Companys intent is to take advantage of the Bergio brand and establish a chain of retail stores worldwide. Our branded product lines are products and/or collections designed by our designer and CEO Berge Abajian and will be the centerpiece of our retail stores.
In September 2019, Bergio International, Inc. filed a Certificate of Amendment to the Certificate of Incorporation to effectuate a 1-for-10,000 reverse stock split of the Companys common stock. All share and per share data has been adjusted to reflect such stock split.
On February 19, 2020, the Company changed its state of incorporation to the State of Wyoming.
Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary consisting of normal recurring adjustments to present fairly the financial position of the Company as of December 31, 2019, the results of operations for the years ended December 31, 2019 and 2018, and statements of cash flows for the years ended December 31, 2019 and 2018. The financial statements have been prepared in accordance with the requirements of Form 10-K.
Going Concern
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.
The Company has suffered recurring losses, and at December 31, 2019, the Company had a stockholders deficit of $612,716. As of December 31, 2019, the Company had only $22,790 cash on hand and $470,289 in convertible debentures due on December 31, 2019. These factors raise substantial doubt about the Company's ability to continue as a going concern. The recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which in turn, is dependent upon the Company's ability to raise capital and/or generate positive cash flows from operations.
In addition to obtaining new customers and increasing sales to existing customers, management plans to achieve profitability by also establishing Bergio as a holding company for the purpose of establishing retails stores worldwide. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
F-7
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 2. Summary of Significant Accounting Policies
Principles of Consolidation:
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, and include the Company and its wholly-owned subsidiary. All significant inter-company accounts and transactions have been eliminated.
Use of Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Risks and Uncertainties:
The Companys operations are subject to a number of risks, including but not limited to changes in the general economy, demand for the Companys products, and the success of its customers.
Revenue Recognition:
Revenues are recognized at the time of shipment to with the price to the buyer being fixed and determinable and collectability assured, provided title and risk of loss is transferred to the customer. Provisions, when appropriate, are made where the right to return exists.
Shipping and handling costs charged to customers are classified as sales, and the shipping and handling costs incurred are included in cost of sales.
Fair Value of Financial Instruments:
The Company estimates that the fair value of all financial instruments at December 31, 2019 and, 2018, as defined in FASB ASC 825 Financial Instruments, does not differ materially, except for the items discussed below, from the aggregate carrying values of its financial instruments recorded in the accompanying consolidated balance sheets. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value.
The carrying amounts reported in the balance sheets as of December 31, 2019 and 2018 for cash, accounts receivable, inventories and accounts payable and loans payable approximate the fair value because of the immediate or short-term maturity of these financial instruments. Each reporting period we evaluate market conditions including available interest rates, credit spreads relative to our credit rating and liquidity in estimating the fair value of our debt. After considering such market conditions, we estimate that the fair value of debt approximates its carrying value.
F-8
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 2. Summary of Significant Accounting Policies (continued)
Accounting for Income Taxes:
The Company accounts for income taxes using the asset and liability method described in FASB ASC 740, Income Taxes. Deferred tax assets arise from a variety of sources, the most significant being: a) tax losses that can be carried forward to be utilized against profits in future years; b) expenses recognized for financial reporting purposes but disallowed in the tax return until the associated cash flow occurs; and c) valuation changes of assets which need to be tax effected for book purposes but are deductible only when the valuation change is realized.
Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when such differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefit which is not more likely than not to be realized. In assessing the need for a valuation allowance, future taxable income is estimated, considering the realization of tax loss carryforwards. Valuation allowances related to deferred tax assets can also be affected by changes to tax laws, changes to statutory tax rates and future taxable income levels. In the event it was determined that the Company would not be able to realize all or a portion of our deferred tax assets in the future, we would reduce such amounts through a charge to income in the period in which that determination is made. Conversely, if we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net carrying amounts, we would decrease the recorded valuation allowance through an increase to income in the period in which that determination is made.
Income Tax Uncertainties:
The Company accounts for uncertainties in income taxes under ASC 740-10-50 which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10 requires that the Company determine whether the benefits of its tax positions are more-likely-than-not of being sustained upon audit based on the technical merits of the tax position. The Company recognizes the impact of an uncertain income tax position taken on its income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. The implementation of ASC 740-10 had no impact on the Companys results of operations or financial position.
Despite the Companys belief that its tax return positions are consistent with applicable tax laws, one or more positions may be challenged by taxing authorities. Settlement of any challenge can result in no change, a complete disallowance, or some partial adjustment reached through negotiations or litigation.
Interest and penalties related to income tax matters, if applicable, will be recognized as income tax expense. During the years ended December 31, 2019 and 2018, the Company did not incur any expense related to interest or penalties for income tax matters, and no such amounts were accrued as of December 31, 2019 and 2018.
Cash and Cash Equivalents:
Cash equivalents are comprised of certain highly liquid instruments with a maturity of three months or less when purchased. The Company did not have any cash equivalents on hand at December 31, 2019 and December 31, 2018.
F-9
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 2. Summary of Significant Accounting Policies (continued)
Accounts Receivable:
Accounts receivable are generated from sales of fine jewelry to retail outlets throughout the United States. At December 31, 2019 and December 31, 2018, accounts receivable were substantially comprised of balances due from retailers.
The Company performs ongoing credit evaluations of its customers and adjusts credit limits based on customer payment and current credit worthiness, as determined by review of their current credit information. The Company continuously monitors credit limits for and payments from its customers and maintains provision for estimated credit losses based on its historical experience and any specific customer issues that have been identified. While such credit losses have historically been within the Companys expectation and the provision established, the Company cannot guarantee that this will continue.
An allowance for doubtful accounts is provided against accounts receivable for amounts management believes may be uncollectible. The Company determines the adequacy of this allowance by regularly reviewing the composition of its accounts receivable aging and evaluating individual customer receivables, considering the customers financial condition, credit history and current economic circumstance. The Company historically has been able to collect the accounts receivable balance during a period of nine months to a year. While credit losses have historically been within the Companys expectation and the provision established, the Company cannot guarantee that this will continue. As of December 31, 2019 and 2018, the allowance for doubtful accounts was $-0- and $-0-, respectively.
Concentrations of Credit Risk:
Cash Held in Banks: The Company maintains cash balances at a financial institution that is insured by the Federal Deposit Insurance Corporation (FDIC) up to federally insured limits. At times balances may exceed FDIC insured limits. The Company has not experienced any losses in such accounts.
Accounts Receivable: The Companys customer base is primarily comprised of balances due from retailers. Concentrations of credit risk with respect to accounts receivable is limited due to the wide variety of customers and markets into which the Companys services are provided, as well as their dispersion across many different geographical areas. The Company has been expanding its brand into retail stores. These sales come with a lower degree of credit risk as these sales are made by cash or credit card. As is characteristic of the Companys business and of the jewelry industry generally, the Company extends its customers seasonal credit terms. The carrying amount of receivables approximates fair value. The Company routinely assesses the financial strength of its customers and believes its credit risk exposure on accounts receivable is limited. Based on managements review of accounts receivable, an allowance for doubtful accounts is recorded, if appropriate. The Company does not require collateral to support these financial instruments.
Inventories:
Inventories consist primarily of finished goods, and are stated at the lower of cost or market. Cost is determined using the weighted average method, and average cost is recomputed after each inventory purchase or sale. Inventories are written down if the estimated net realizable value is less than the recorded value, if appropriate. The Company reviews the carrying cost of inventories by product to determine the adequacy of reserves for obsolescence. In accounting for inventories, the Company must make estimates regarding the estimated realizable value of inventory. The estimate is based, in part, on the Companys forecasts of future sales and age of inventory.
Subsequent Events:
The Company evaluated subsequent events, which are events or transactions that occurred after December 31, 2019 through the issuance of the accompanying financial statements.
F-10
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 2. Summary of Significant Accounting Policies (continued)
Property and Equipment:
Equipment is stated at cost, net of accumulated depreciation. Depreciation and amortization are provided on a straight-line basis over periods ranging from 5 to 10 years.
Leasehold improvements are amortized over the term of the lease or the useful life of the asset, whichever is shorter.
Maintenance, repairs, and renewals that do not materially add to the value of the equipment nor appreciably prolong its life are charged to expense as incurred.
When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in the Statement of Operations.
Long-Lived Assets:
The Company assesses the recoverability of the carrying value of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future, undiscounted cash flows expected to be generated by an asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No impairment losses were recognized for the years ended December 31, 2019 and 2018.
Investment in Unconsolidated Affiliates:
The Company owns less than 20% or otherwise does not exercise significant influence, are stated at cost. At December 31, 2019 and December 31, 2018, the Company had an investment in which the Company owned less than 1% interest in an unconsolidated affiliate and therefore the investment is carried at cost.
Equity-Based Compensation:
The Company accounts for equity based compensation transactions with employees under the provisions of ASC Topic No. 718, Compensation: Stock Compensation (Topic No. 718). Topic No. 718 requires the recognition of the fair value of equity-based compensation in net income. The fair value of common stock issued for compensation is measured at the market price on the date of grant. The fair value of the Companys equity instruments, other than common stocks, is estimated using a Black-Scholes option valuation model. This model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award. In addition, the calculation of equity-based compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. The fair value of equity-based awards granted to employees is amortized over the vesting period of the award and the Company elected to use the straight-line method for awards granted after the adoption of Topic No. 718.
The Company accounts for equity based transactions with non-employees under the provisions of ASC Topic No. 505-50, Equity-Based Payments to Non-Employees (Topic No. 505-50). Topic No. 505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to non-employees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, the Company recognizes an asset or expense in the same manner as if it was to pay cash for the goods or services instead of paying with or using the equity instrument.
F-11
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 2. Summary of Significant Accounting Policies (continued)
Net (Loss) Income per Common Share:
Basic net (loss) income per share attributable to common stockholders is computed by dividing net (loss) income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period, including common stock equivalents, such as stock options and warrants using the treasury stock method. Diluted loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period and excludes the anti-dilutive effects of common stock equivalents.
Recently Adopted Authoritative Pronouncements
In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective on January 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. The Company adopted the new standard on January 1, 2019 and use the effective date as the date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. The Company elects the package of practical expedients, which permits the Company not to reassess under the new standard prior conclusions about lease identification, lease classification and initial direct costs. On adoption, the Company recognized additional operating lease liabilities of approximately $911,000 with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases.
In June 2018, the FASB, issued ASU No. 2018-07 to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The new guidance expands the scope of Accounting Standards Codification, or ASC, 718 to include share-based payments granted to nonemployees in exchange for goods or services used or consumed in an entitys own operations and supersedes the guidance in ASC 505-50. The guidance is effective for public business entities in annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted, including in an interim period for which financial statements have not been issued, but not before an entity adopts ASC 606. This was adopted on January 1, 2019 and did not have a material impact on the financial position and results of operations.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes - simplifying the accounting for income taxes (Topic 740), which is meant to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The amendment also improves consistent application and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We do not expect the adoption of this standard to have a significant impact on our financial position and results of operations.
No other recently issued accounting pronouncements had or are expected to have a material impact on the Companys consolidated financial statements.
F-12
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 3. Basic and Diluted Income (Loss) Per Share
Net loss per share has been computed according to FASB ASC 260, Earnings per Share, which requires a dual presentation of basic and diluted earnings (loss) per share (EPS). Basic EPS represents net loss divided by the weighted average number of common shares outstanding during a reporting period. Diluted EPS reflects the potential dilution that could occur if securities, including warrants and options, were converted into common stock. The dilutive effect of outstanding warrants, options, and/or conversions is reflected in earnings per share by use of the treasury stock method. In applying the treasury stock method for stock-based compensation arrangements, the assumed proceeds are computed as the sum of the amount the employee must pay upon exercise. For the years ended December 31. 2019 and 2018, basic net loss per share equaled the diluted loss per share, since the effect of shares potentially issuable upon exercise or conversion was anti-dilutive. For the years ended December 31, 2019 and 2018, 10,108,052 and 582,288 shares, respectively, issuable upon the conversion of convertible debt were not included in the computation of diluted net loss because their inclusion would be anti-dilutive.
|
|
December 31,
2019
|
|
December 31,
2018
|
Basic net loss per share computation:
|
|
|
|
|
Net loss
|
|
$
|
(3,035,043)
|
|
$
|
(417,314)
|
Weighted-average common shares outstanding
|
|
|
3,641,196
|
|
|
496,752
|
Basic net loss per share
|
|
$
|
(0.83)
|
|
$
|
(0.84)
|
Diluted net loss per share computation:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(3,035,043)
|
|
$
|
(417,314)
|
Weighted-average common shares outstanding:
|
|
|
3,641,196
|
|
|
496,752
|
Incremental shares attributable to the assumed exercise of
outstanding stock options and warrants
|
|
|
--
|
|
|
--
|
Total adjusted weighted-average shares
|
|
|
3,641,196
|
|
|
496,752
|
Diluted net loss per share
|
|
$
|
(0.83)
|
|
$
|
(0.84)
|
Note 4. Property and Equipment
Property and equipment consists of the following:
|
|
December 31,
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
Leasehold improvements
|
|
$
|
356,693
|
|
|
$
|
349,121
|
Office and equipment
|
|
|
566,308
|
|
|
|
566,308
|
Selling equipment
|
|
|
8,354
|
|
|
|
8,354
|
Furniture and fixtures
|
|
|
18,487
|
|
|
|
18,487
|
|
|
|
|
|
|
|
|
Total at cost
|
|
|
949,842
|
|
|
|
942,270
|
Less: Accumulated depreciation & amortization
|
|
|
(823,160)
|
|
|
|
(769,213)
|
|
|
|
|
|
|
|
|
|
|
$
|
126,682
|
|
|
$
|
173,057
|
Depreciation and amortization expense related to the assets above for the years ended December 31, 2019 and 2018 was $53,947 and $101,708, respectively.
F-13
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 5. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consist of the following:
|
|
December 31,
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
102,779
|
|
|
$
|
121,493
|
Accrued interest
|
|
|
207,284
|
|
|
|
143,024
|
Accrued liabilities - other
|
|
|
39,503
|
|
|
|
14,510
|
|
|
|
|
|
|
|
|
|
|
$
|
349,566
|
|
|
$
|
279,027
|
Note 6. Related Party
Advances from Principal Executive Officer and Accrued Interest
The Company receives periodic advances from its principal executive officer based upon the Companys cash flow needs. At December 31, 2019 and December 31, 2018, $383,717 and $455,541, respectively, was due to such officer, including accrued interest. On September 30, 2018, the Principal Executive Office signed an agreement with the Company extending payments in the amount of $1,000,000 due him until January 31, 2020 as a result of the financial situation of the Company. As such, all deferred compensation in the amount of $795,571 and $204,429 of the advances was classified as a long-term liability at December 31, 2018. During the year ended December 31, 2019, the principal executive officer converted $500,000 of deferred compensation for common stock of the Company. As such, as of December 31, 2019, deferred compensation of $297,513 and $202,487 of the advances, totaling $500,000, was classified as a long-term liability. Interest expense is accrued at an average annual market rate of interest which was 4.75% and 5.25% at December 31, 2019 and December 31, 2018, respectively. Interest expense due to such officer was $52,494 and $45,392 for the years ended December 31, 2019 and 2018, respectively. Accrued interest was $202,487 and $149,993 at December 31, 2019 and 2018, respectively. No terms for repayment have been established.
Effective February 28, 2010, the Company entered into an employment agreement with its PEO. The agreement, which is for a five year term, provides for an initial base salary of $175,000 per year with a 3% annual increase thereafter (the Base Salary). The PEO is also entitled to certain bonuses based on net profits before taxes and other customary benefits, as defined in the agreement. In addition, since it is understood that the Company is employing the PEO during a time of economic decline throughout the U.S. and at times and from time to time, the Company may not be in a position to pay the full amount of Base Salary owed the PEO it is understood and agreed to by the Board, that as long as the Company is unable to pay the CEO the full amount of his Base Salary that the Board shall issue to him, from time to time, an amount of shares that will allow him to remain in possession of fifty-one percent (51%) of the Companys then outstanding shares of common stock. Such issuances shall be made to the PEO at any time when his total share holdings are reduced to an amount less than fifty-one percent (51%) as a result of issuance of shares of common stock made on behalf of the Company.
F-14
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 6. Related Party (continued)
Effective September 1, 2011, the Company and PEO entered into an Amended and Restated Employment Agreement (the Amended Agreement) which primarily retains the term and compensation of the original agreement. The Amended Agreement, however, removes the section which previously provided for the issuance of Company common stock to the CEO, from time to time, when the Company is unable to pay the CEO the full amount of his Base Salary (as defined in the Amended Agreement) which would allow the CEO to maintain a fifty-one percent (51%) share of the Companys outstanding common stock. However, the CEO does have the right to request all or a portion of his unpaid Base Salary be paid with the Companys restricted common stock. In addition, the Amended Agreement provides for the issuance of 51 shares of newly authorized Series A Preferred Stock to be issued to the CEO. As defined in the Certificate of Designations, Preferences and Rights of the Series A Preferred Stock, each share of Series A Preferred Stock has voting rights such that the holder of 51 shares of Series A Preferred Stock will effectively maintain majority voting control of the Company. Effective November 3, 2011, the CEO notified the Company that for the one year period, retroactive from April 1, 2011, through December 31, 2012, he would reduce his Base Salary to $100,000. The reduction in base compensation was subsequently extended to December 31, 2013. The CEO is currently deferring his salary to conserve cash. Deferred wages due to the CEO amounted to $795,571 and $628,309 for the periods ended December 31, 2018 and December 31, 2017, respectively. On September 30, 2018, the Principal Executive Office signed an agreement with the Company extending payments in the amount of $1,000,000 due him until January 31, 2020 as a result of the financial situation of the Company. This amount was reduced t $500,000 after the PEO converted $500,000 of deferred compensation into 17,000,000 shares of common stock of the Company. As of December 31, 2019 and 2018, deferred compensation due to the PEO were $345,571 and $795,571, respectively. As of December 31, 2019 and 2018, $297,513 and $795,571, respectively, of these amounts were classified as a long-term liability.
On January 1, 2019, the CEO amended his employment agreement with the Company for a term of one year expiring December 31, 2019. The agreement primarily retains the terms of the Amended Agreement, but lowers the compensation to $100,000 for the year. Effective July 1, 2019, the Principal Executive Officer agreed to stop deferral of his salary at least through December 31, 2019 as a result of the financial situation of the Company as a result of the Companys financial condition. Effective January 1, 2020, the CEOs salary was restated back to $175,000.
Note 7. Convertible Debt
Fife, Typenex and Iliad
In December 2012, the Company entered into a $325,000 convertible note with Fife consisting of three tranches to be drawn down with the first tranche totaling $125,000, including $25,000 in loan costs and additional two tranches totaling $200,000. The note bears a 5% annual interest rate and matures eighteen months from the date of issuance. The note is convertible into shares of the Companys common stock based on 70% of the average of the three lowest closing prices of the common stock for the proceeding 15 consecutive trading days immediately prior to the conversion. During 2013, the conversion price was fixed at $0.005 per share. As of December 31, 2012, the Company only drew down the first tranche totaling $125,000. On February 11, 2013, April 5, 2013, April 23, 2013, and July 1, 2013, the Company drew down an additional $250,000.
On June 5, 2014, the Company, Fife, Typenex and Iliad Research and Trading, LLP (Iliad) entered into an Assignment and Assumption Agreement and Note Purchase Agreement (the Note Purchase Agreement) whereby Iliad acquired all of Fifes and Typenexs right, title, obligations and interest in, to and arising under the Company Notes (as defined in the Note Purchase Agreement) and the Note Purchase Documents (as defined in the Note Purchase Agreement).
F-15
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 7. Convertible Debt (continued)
On October 17, 2014, the Company entered into a financing arrangement with Iliad to provide additional financing in the amount of up to $450,000 through the issuance of a Secured Convertible Promissory Note (the Note). The Company agreed to cover Iliads legal, accounting and other related fees in the amount of $5,000, which is included in the principal balance of the Note. The Note will accrue interest at the rate of 8% per annum until the Note is paid in full. Monies are to be drawn in eight tranches with the initial tranche in the amount of $105,000, and the remaining balance of $350,000 in seven tranches of $50,000 each. The Company drew down the initial tranche on October 17, 2014. The Note has a maturity date of July 17, 2016.
Beginning six months after October 17, 2014 and on the same day each month thereafter, the Company shall make an installment payment, based upon the unpaid balance. At the option of the Company, payments may be made in cash or by converting the installment amount into shares of the Companys common stock. The conversion price is equal to the lesser of (i) $0.0005 per share and (ii) 67.5% of the average of the three lowest closing bid prices in the 15 trading days immediately preceding the conversion. The Company has the right to prepay the Note at 135% of the outstanding balance at the time of prepayment. During the year ended December 31, 2019, principal of $12,270 and accrued interest of $3,048 was converted into 1,750,000 shares of common stock. During the year ended December 31, 2018, principal of $14,733 and accrued interest of $907 was converted into 23,000 shares of common stock. The outstanding balances at December 31, 2019 and December 31, 2018 were $7,123 and $19,393, respectively with accrued interest of $54 and $1,457 at December 31, 2019 and December 31, 2018, respectively.
During the year ended December 31, 2014, the Company drew down an additional $314,703. During the years ended December 31, 2019 and 2018, there were no conversions. The outstanding balances at December 31, 2019 and December 31, 2018 were $329,175 and $329,175 respectively, with accrued interest of $141,487 and $104,823 at December 31, 2019 and December 31, 2018, respectively.
111 Recovery Corp.
On March 11, 2015, the Company entered into an 8% convertible note in the amount of $38,000 with Vis Vires Group, subsequently assigned to 111 Recovery Group. The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before six months from the date of issuance, the holder may elect to convert all or part of the convertible into the Companys common stock. The note is convertible into shares of the Companys common stock at a price equal to 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. There were no conversions during the year ended December 31, 2019. During the year ended December 31, 2018, accrued interest of $16,800 was converted into 18,667 shares of common stock. The Company is currently in default, and interest accrues at the default interest rate of 22%. The outstanding balances at December 31, 2019 and 2018 were $38,000 and $38,000, respectively, with accrued interest of $20,411 and $9,520 at December 31, 2019 and December 31, 2018, respectively. The Company is currently negotiating an extension to this note.
On April 30, 2015, the Company entered into an 8% convertible note in the amount of $33,000 with Vis Vires, subsequently assigned to 111 Recovery Group. The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before six months from the date of issuance, the holder may elect to convert all or part of the convertible into the Companys common stock. The note is convertible into shares of the Companys common stock at a price equal to 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. There were no conversions during the years ended December 31, 2019 and 2018. The Company is currently in default, and interest accrues at the default interest rate of 22%. The outstanding balance at December 31, 2019 and 2018 were $33,000 with accrued interest of $31,953 and $9,644 at December 31, 2019 and 2018, respectively. The Company is currently negotiating an extension to this note.
F-16
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 7. Convertible Debt (continued)
Sims Investment Holdings, Inc.
During 2018, the Company received $125,000 in the form of a note payable. On July 1, 2019 (Maturity Date), the amount was converted into a 10% convertible promissory note. The principal and accrued interest from the original notes payable become due on July 1, 2019. The note accrues interest on the unpaid principal balance at the rate of 10% per annum from the date hereof (the Issue Date) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of 10% per annum from the due date until paid (Default Interest). Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed. The note is convertible into shares of the Companys common stock, at the option of the holder. . The conversion price shall be $0.01 per common share. There were no conversions during the year ended December 31, 2019. The Company is currently in default, and interest accrues at the default interest rate of 10%. The outstanding balance at December 31, 2019 was $125,000 with accrued interest of $9,514 at December 31, 2019.
Auctus Funds, LLC.
On November 6, 2019, the Company entered into a 12% convertible promissory note in the amount of $125,000 with Auctus Fund, LLC. The principal and accrued interest is payable on or before August 20, 2020 and interest accrues at the rate of 12% per annum. Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum and (ii) the maximum amount permitted under law from the due date thereof until the same is paid (the Default Interest). The Holder shall have the right from time to time to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under this note into fully paid and non-assessable shares of common stock.
The conversion price shall equal the lesser of: (i) the lowest trading price during the previous twenty-five (25) trading day period ending on the latest complete trading day prior to the date of this Note, and (ii) the variable conversion which shall mean 60% multiplied by the lowest trading price for the common stock during the twenty-five (25) trading day period ending on the latest complete trading day prior to the conversion date. Furthermore, the conversion price may be adjusted downward if, within three (3) business days of the transmittal of the notice of conversion to the Borrower or Borrowers transfer agent, the Common Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion.
Crown Bridge Partners Inc.
On October 29, 2019, the Company entered into a 10% convertible promissory note in the amount of $100,000 with Crown Bridge Partners, LLC. This Note carries a prorated original issue discount of up to $8,000.00 to cover the Holders accounting fees, due diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the note, which is included in the principal balance of this note. The holder paid $23,000 for the first tranche ($25,000 less $2,000 discount). The maturity date for each tranche funded shall be twelve (12) months from the effective date of each payment as well as any accrued and unpaid interest and other fees. Interest accrues at the rate of 10% per annum, and shall be computed on the basis of a 365 day year and the actual number of days elapsed. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate the of lesser of (i) 15% per annum and (ii) the maximum amount permitted under law from the due date thereof until the same is paid (the Default Interest). The Holder shall have the right from time to time to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under this note into fully paid and non-assessable shares of common stock.
The conversion price shall mean 60% multiplied by the lowest trading price (representing a discount rate of 40%) during the previous twenty-five (25) trading day period ending on the latest complete trading day prior to the date of this note. The conversion price shall be subject to a floor price of $0.000035.
F-17
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 7. Convertible Debt (continued)
Fidelis Capital, LLC.
On November 5, 2019, the Company entered into a 10% convertible promissory note in the amount of $30,000 with Fidelity Capital, LLC. The principal and accrued interest is payable on or before November 5, 2020 and interest accrues at the rate of 10% per annum. If the borrower fails to pay the default amount within five (5) business days of written notice that such amount is due and payable, then the holder shall have the right at any time (and so long and to the extent that there are sufficient authorized shares), to require the borrower, upon written notice, to immediately issue, in lieu of the default amount, the number of shares of common stock of the borrower equal to the default amount divided by the conversion price then in effect.
The Holder shall have the right from time to time to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under this note into fully paid and non-assessable shares of common stock.
The conversion price shall mean a price which is a 40% discount to the lowest trading price in the fifteen (15) days prior to the day that the Holder requests conversion.
As of December 31, 2019 and December 31, 2018, total convertible debt was $532,616 and $419,568, respectively, net of debt discount of $179,682 and $-0-, respectively.
Note 8. Derivative Liability
The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 Derivatives and Hedging; Embedded Derivatives (Topic No. 815-15). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Companys convertible debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes pricing model. During the year ended December 31, 2019, the Company recorded debt discount in the amount of $337,496. Amortization of debt discount amounted to $95,487 and $-0- for the years ended December 31, 2019 and 2018, respectively. Unamortized debt discount at December 31, 2019 and 2018, were $242,009 and $-0-, respectively. The derivative liability is revalued each reporting period using the Black-Scholes model. As of December 31, 2019 and December 31, 2018, the derivative liability was $396,220 and $-0-, respectively.
The Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible note at December 31, 2019:
Stock Price - The stock price was based closing price of the Companys stock as of the valuation date, which was $.031 at December 31, 2019.
Variable Conversion Prices - The conversion price was based on: (i) 40% discount to the lowest trading price in the fifteen (15) days prior to the conversion at December 31, 2019 for Fidelis Capital; (ii) 60% multiplied by the lowest trading price during the previous twenty-five (25) trading day period prior to the conversion at December 31, 2019 for Crown Bridge Partners; (iii) the lesser of: (a) the lowest trading price during the previous twenty-five (25) trading day period ending on the latest complete trading day prior to the date of this Note, and (b) the variable conversion which shall mean 60% multiplied by the lowest trading price for the common stock during the twenty-five (25) trading day period ending on the latest complete trading day prior to the conversion at December 31, 2019 for Auctus Fund, LLC.
Time to Maturity - The time to maturity was determined based on the length of time between the valuation date and the maturity of the debt. Time to maturity ranged from 302 to 310 days at December 31, 2019.
F-18
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 8. Derivative Liability (continued)
Risk Free Rate - The risk free rate was based on the Treasury Note rate as of the valuation dates with a term commensurate with the remaining term of the debt. The risk free rate at December 31, 2019 was 1.59%, based on the term of the note.
Volatility - The volatility was based on the historical volatility of the Company. The average volatility was 568.70% at December 31, 2019.
Note 9. Stockholders Equity
The Company is authorized to issue 6,000,000,000 shares of common stock, par value $0.00001 per share and 51 shares of preferred stock, par value $0.00001 per share. At December 31, 2019 and December 31, 2018, there were 19,289,141 and 539,141 common shares issued and outstanding, respectively. On April 3, 2014, the Company filed a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware to reduce the par value of all shares of common stock and preferred stock from $0.001 to $0.00001 per share. On February 26, 2014, the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of authorized shares of capital stock of the Company to 6,000,000,000 shares. Effective on October 14, 2014, the Company filed a Certificate of Amendment to the Certificate of Incorporation to effectuate a 1-for-1,000 reverse stock split of the Companys common stock. In September 2019, Bergio International, Inc. filed a Certificate of Amendment to the Certificate of Incorporation to effectuate a 1-for-10,000 reverse stock split of the Companys common stock. All share and per share data has been adjusted to reflect such stock split.
All share and per share data has been adjusted to reflect such stock splits and change in par value. Effective September 1, 2011, the Company authorized and issued 51 shares of Series A Preferred Stock, par value $0.001 to its CEO. In April 2014, the Company changed its par value on its preferred stock from $0.001 to $0.00001. The Series A Preferred Stock pays no dividends and has no conversion rights. Each share of Series A Preferred Stock has voting rights such that the holder of 51 shares of Series A Preferred Stock will effectively maintain majority voting control of the Company.
For the year ended December 31, 2019, the Company issued the following shares of common stock:
1)On October 19, 2019, we issued 17,000,000 shares of common stock valued at $2,890,000 to Berge Abajian, the Companys President and PEO, for conversion of deferred compensation.
2)On November 27, 2019, we issued 1,750,000 shares of common stock valued at $15,318 to Illiad for conversion of its convertible debt and accrued interest.
For the year ended December 31, 2018, the Company issued the following shares of common stock:
1)On February 8, 2018, we issued 23,000 shares of common stock valued at $15,640 to Illiad Capital for conversion of its convertible debt and accrued interest.
2)On May 9, 2018, we issued 55,556 shares of common stock valued at $5,000 to KBM Financial for conversion of its convertible debt and accrued interest.
3)On October 4, 2018, we issued 24,200 shares of common stock valued at $14,520 to KBM Financial for payment of accrued interest.
4)On October 8, 2018, we issued 5,514 shares of common stock valued at $4,963 to KBM Financial for payment of accrued interest.
5)On October 8, 2018, we issued 18,667 shares of common stock valued at $16,800 to VisVires, subsequently assigned to 111 Recovery Group, for payment of accrued interest.
F-19
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 10. Income Taxes
The recognized deferred tax asset is based upon the expected utilization of its benefit from future taxable income. The Company has federal net operating loss (NOL) carryforwards of approximately $5,025,000 as of December 31, 2019, expiring through various dates through 2036.
The foregoing amounts are managements estimates and the actual results could differ from those estimates. Future profitability in this competitive industry depends on continually obtaining and fulfilling new profitable sales agreements and modifying products. The inability to increase sales could reduce estimates of future profitability, which could affect the Companys ability to realize the deferred tax assets. Significant components of the Companys deferred tax assets and liabilities are summarized as follows:
|
|
December 31,
|
|
December 31,
|
|
|
2019
|
|
2018
|
Deferred tax assets:
|
|
|
|
|
Net operating loss carryforwards
|
|
$
|
1,407,182
|
|
$
|
1,372,854
|
Startup costs
|
|
|
1,827
|
|
|
2,359
|
Deferred compensation
|
|
|
103,671
|
|
|
238,671
|
Depreciation
|
|
|
(38,004)
|
|
|
(16,406)
|
Deferred tax asset
|
|
|
1,474,676
|
|
|
1,597,479
|
Less valuation allowance
|
|
|
(1,474,676)
|
|
|
(1,597,459)
|
|
|
|
|
|
|
|
Deferred tax asset, net
|
|
$
|
--
|
|
$
|
--
|
The 2017 Tax Cuts and Jobs Act (Tax Reform) was enacted on December 22, 2017. The Tax Reform includes a number of changes in existing tax law impacting businesses including a permanent reduction in the U.S. federal statutory rate from 34% to 21%, effective on January 1, 2018. Under U.S. GAAP, changes in tax rates and tax law are accounted for in the period of enactment and deferred tax assets and liabilities are measured at the enacted tax rate. The rate reconciliation includes the Companys assessment of the accounting under the Tax Reform and is based on information that was available to management at the time the consolidated financial statements were prepared.
Based upon the net losses historically incurred and, the prospective global economic conditions, management believes that it is not more likely than not that the deferred tax asset will be realized and has provided a valuation allowance of 100% of the deferred tax asset.
A reconciliation of the income tax (benefit) provision at the statutory Federal tax rate of 21% and 321%, respectively, for the years ended December 31, 2019 and 2018 to the income tax (benefit) provision recognized in the financial statements is as follows:
|
|
December 31,
|
|
|
December 31,
|
|
|
2019
|
|
|
2018
|
U.S. statutory rate
|
|
|
(21%)
|
|
|
|
(21%)
|
Income tax expenses - state and local, net of federal benefit
|
|
|
6%
|
|
|
|
6%
|
Change in valuation allowance
|
|
|
15%
|
|
|
|
15%
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
--
|
|
|
|
--
|
F-20
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 11. Commitments
Business Interruption
The Company may be impacted by public health crises beyond its control. This could disrupt its operations and negatively impact sales of its products. The Companys customer and, suppliers may experience similar disruption. In December 2019, a novel strain of the Coronavirus, COVID-19, was reported to have surfaced in Wuhan, China, which has evolved into a pandemic. This situation and preventative or protective actions that governments have taken to counter the effects of the pandemic have resulted in a period of business disruption, including delays in shipments of products and raw materials. COVID-19 has spread to over 175 countries, including the United States, and efforts to contain the spread of COVID-19 have intensified. To the extent the impact of COVID-19 continues or worsens, the demand for the Companys products may be negatively impacted. COVID-19 has also impacted the Companys sales efforts as it has been forced to shut down its two New Jersey retail stores. The Companys ability to promote sales through promotional activities has also been constrained. Trade shows and sales conferences, major events used to introduce and sell the Companys products, have been postponed indefinitely. The length and severity of the pandemic could also affect the Companys wholesale sales, which could in turn result in reduced sales and a lower gross margin.
Note 12. Litigation
The Company is currently not involved in any litigation that it believes could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
Note 13. Significant Customer Concentrations
During the year ended December 31, 2019, the Company had four customers, each over 5% of sales, which accounted for 32% of total sales. No other no single customer accounted for over 5% or more of our annual sales. During the year ended December 31, 2018, the Company had one customer that accounted for 6% of total sales. No other no single customer accounted for over 5% or more of our annual sales.
As of December 31, 2019 accounts receivable, net amounted to only $85,711 and two customers represented 84% of this balance. As of December 31, 2018 accounts receivable, net amounted to only $39,354 and three customers represented 91% of this balance.
Note 14. Fair Value Measurements
FASB ASC 820, Fair Value Measurements defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and prescribes disclosures about fair value measurements.
As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).
F-21
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 14. Fair Value Measurements (continued)
The three levels of the fair value hierarchy defined by ASC 820 are as follows:
Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.
Level 2 - Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.
Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in managements best estimate of fair value.
The valuation techniques that may be used to measure fair value are as follows:
Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities
Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts, including present value techniques, option-pricing models and excess earnings method
Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost)
The carrying value of the Companys borrowings is a reasonable estimate of its fair value as borrowings under the Companys credit facility have variable rates that reflect currently available terms and conditions for similar debt.
The Companys assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. As required by FASB ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company has no assets or liabilities that are required to be classified.
In addition, the FASB issued, The Fair Value Option for Financial Assets and Financial Liabilities. This guidance expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value option for any of its qualifying financial instruments.
F-22
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 14. Fair Value Measurements (continued)
The following table sets forth by level within the fair value hierarchy the Companys financial assets and liabilities that were accounted for at fair value as of December 31, 2019 and December 31, 2018. As required by FASB ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
December 31, 2019
|
|
Level I
|
|
|
Level II
|
|
|
Level III
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
-
|
|
|
$
|
396,220
|
|
|
$
|
-
|
|
|
$
|
396,220
|
Total liabilities
|
|
$
|
-
|
|
|
$
|
396,220
|
|
|
$
|
-
|
|
|
$
|
396,220
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
Level I
|
|
|
Level II
|
|
|
Level III
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
Total Liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
The following table provides a summary of the changes in fair value of our Level 3 financial liabilities for the years ended December 31, 2019 and 2018 as well as the unrealized gains or losses included in income.
|
|
December 31,
|
|
December 31,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
Fair value at beginning of period
|
|
$
|
-0-
|
|
$
|
-0-
|
|
|
|
|
|
|
|
New issuances
|
|
|
715,853
|
|
|
-
|
Change in fair value
|
|
|
(319,633)
|
|
|
-
|
|
|
|
|
|
|
|
Fair value at end of period
|
|
$
|
396,220
|
|
$
|
--
|
Note 15. Operating Lease Liability
The Company leases certain office and manufacturing facilities and equipment.
Currently, we lease a 1,730 square feet in Fairfield, NJ for our offices. The lease expired in August 31, 2010, and is being renewed on a month-to-month basis.
Rent expense for the Company's operating leases for year ended December 31, 2019 and 2018 amounted to approximately $53,919 and $30,218, respectively.
The Company leases retail space at two different locations. One lease has monthly payments from $1,350 to $1,665 which expires in May 2024. The second lease has a contingent rental based on 10% of sales. Contingent rentals are not included in operating lease liabilities. The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date. The Company estimated its incremental borrowing rate based on its credit quality, line of credit agreement and by comparing interest rates available in the market for similar borrowings. The Company used a discount rate of 10% at December 31, 2019.
F-23
BERGIO INTERNATIONAL, INC.
Notes to Consolidated Financial Statements (continued)
Note 15. Operating Lease Liability (continued)
The following table reconciles the undiscounted future minimum lease payments (displayed by year in aggregate) under non-cancelable operating leases with terms more than one year to the total operating lease liabilities on the consolidated balance sheet as of December 31, 2019:
2020
|
$
|
17,460
|
2021
|
|
18,180
|
2022
|
|
18,900
|
2023
|
|
19,700
|
2023 and thereafter
|
|
6,660
|
Total minimum lease payments
|
|
80,900
|
Less amounts representing interest
|
|
(15,065)
|
Present value of net minimum lease payments
|
|
65,835
|
Less current portion
|
|
(11,880)
|
Long-term capital lease obligation
|
$
|
53,955
|
Disclosures related to periods prior to adoption of ASU 2016-02
The Company adopted ASU 2016-842 using the retrospective method at January 1, 2019 as noted in Note 5New Authoritative Accounting Guidance. As required, the following disclosure is provided for periods prior to adoption. Minimum operating lease commitments as of December 31, 2018 that have initial or remaining lease terms in excess of one year as follows:
|
|
Years Ended
December 31, 2018
|
2019
|
|
|
5,400(1)
|
(1)The above amount does not include contingent rentals which may be paid under lease agreement with Ocean Resort Casino. This rental is based upon 10% of gross sales at this location.
(2)Lease renewal for the first retail space did not get executed until April 2019, and, as such, rental obligations are not included in the above amounts as of December 31, 2018.
Note 16. Subsequent Event
The Companys operations may be affected by the recent and ongoing outbreak of the coronavirus disease (COVID-19) which in March 2020, was been declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Companys financial position, operations and cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Companys customers and revenue, labor workforce, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company, including property and equipment.
F-24
Unaudited Interim Financial Statements
BERGIO INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
|
March 31,
2020
|
|
December 31,
2019
|
|
(unaudited)
|
|
|
ASSETS:
|
|
|
|
Current assets:
|
|
|
|
Cash
|
$
|
-
|
|
$
|
22,790
|
Accounts receivable, net of allowance for doubtful accounts of
$-0- at March 31, 2020 and $-0- at December 31, 2019
|
|
77,890
|
|
|
85,711
|
Inventories
|
|
1,188,146
|
|
|
1,165,311
|
Prepaid expenses
|
|
28,120
|
|
|
-
|
Deferred financing costs
|
|
11,897
|
|
|
18,652
|
Total current assets
|
|
1,306,053
|
|
|
1,292,464
|
|
|
|
|
|
|
Property and equipment, net
|
|
118,257
|
|
|
126,682
|
Operating lease right-of-use assets
|
|
63,055
|
|
|
65,835
|
Investment in unconsolidated affiliate
|
|
5,828
|
|
|
5,828
|
|
|
|
|
|
|
Total assets
|
$
|
1,493,193
|
|
$
|
1,490,809
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS DEFICIT:
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
$
|
397,849
|
|
$
|
349,566
|
Loans payable
|
|
30,000
|
|
|
30,000
|
Convertible debt
|
|
562,495
|
|
|
532,616
|
Deferred compensation - CEO - current
|
|
75,399
|
|
|
48,058
|
Advances from Principal Executive Officer and accrued interest
|
|
167,310
|
|
|
181,230
|
Derivative liability
|
|
1,609,602
|
|
|
396,220
|
Operating lease liabilities - current
|
|
12,302
|
|
|
11,880
|
Total current liabilities
|
|
2,854,957
|
|
|
1,549,570
|
|
|
|
|
|
|
Long-term Liabilities:
|
|
|
|
|
|
Deferred compensation - CEO - long-term portion
|
|
295,173
|
|
|
297,513
|
Advances from Principal Executive Officer and accrued interest
|
|
204,827
|
|
|
202,487
|
Operating lease liabilities - long-term
|
|
50,753
|
|
|
53,955
|
Total long-term liabilities
|
|
550,753
|
|
|
553,955
|
|
|
|
|
|
|
Total Liabilities
|
|
3,405,710
|
|
|
2,103,525
|
|
|
|
|
|
|
Commitments and contingencies
|
|
-
|
|
|
-
|
|
|
|
|
|
|
Stockholders' deficit
|
|
|
|
|
|
Series A preferred stock - $0.00001 par value, 51 Shares
Authorized, 51 and 51 shares issued and outstanding
|
|
-
|
|
|
-
|
Common stock, $0.00001 par value; 6,000,000,000 shares
Authorized 22,449,945 and 19,289,141 issued and
outstanding, respectively
|
|
245
|
|
|
193
|
Additional paid-in capital
|
|
11,218,594
|
|
|
11,047,546
|
Accumulated deficit
|
|
(13,131,356)
|
|
|
(11,660,455)
|
Total stockholders' deficit
|
|
(1,912,517)
|
|
|
(612,716)
|
|
|
|
|
|
|
Total liabilities and stockholders' deficit
|
$
|
1,493,193
|
|
$
|
1,490,2809
|
The accompanying notes are an integral part of these consolidated financial statements.
F-25
BERGIO INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
Three Months Ended March 31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Sales, net
|
|
$
|
75,393
|
|
$
|
137,109
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
26,306
|
|
|
38,946
|
|
|
|
|
|
|
|
Gross profit
|
|
|
49,087
|
|
|
98,163
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
|
228,103
|
|
|
160,220
|
Total operating expenses
|
|
|
228,103
|
|
|
160,220
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(179,016)
|
|
|
(62,057)
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
Interest expense
|
|
|
(18,770)
|
|
|
(28,791)
|
Amortization of debt discount
|
|
|
(52,978)
|
|
|
|
Amortization of deferred financing costs
|
|
|
(6,755)
|
|
|
|
Change in fair value of derivatives
|
|
|
(1,213,382)
|
|
|
-
|
Total other income (expense)
|
|
|
(1,291,885)
|
|
|
(28,791)
|
|
|
|
|
|
|
|
Loss before provision for income taxes
|
|
|
(1,470,901)
|
|
|
(90,848)
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,470,901)
|
|
$
|
(90,848)
|
|
|
|
|
|
|
|
Net loss per common share - basic and diluted
|
|
$
|
(0.07)
|
|
$
|
(0.17)
|
|
|
|
|
|
|
|
Weighted average common shares outstanding :
Basic and Diluted
|
|
|
20,920,043
|
|
|
539,141
|
The accompanying notes are an integral part of these consolidated financial statements.
F-26
BERGIO INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS DEFICIT
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2020 AND 2019
(Unaudited)
|
Common Stock
|
Additional
Paid in
|
Accumulated
|
Total
Stockholders
|
|
Shares
|
Amount
|
Capital
|
Deficit
|
Deficit
|
|
|
|
|
|
|
Balance at January 1, 2020
|
19,289,141
|
$
|
193
|
$
|
11,047,546
|
$
|
(11,660,455)
|
$
|
(612,716)
|
|
|
|
|
|
|
|
|
|
|
Stock issued for services
|
4,000,000
|
|
40
|
|
147,960
|
|
-
|
|
148,000
|
Issuance of stock for
debt conversion
|
1,160,804
|
|
12
|
|
23,088
|
|
-
|
|
23,100
|
Net loss
|
-
|
|
-
|
|
-
|
|
(1,470,901)
|
|
(1,470,901)
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2020
|
24,449,945
|
$
|
245
|
$
|
11,218,594
|
$
|
(13,131,356)
|
$
|
(1,912,517)
|
|
Common Stock
|
Additional
Paid in
|
Accumulated
|
Total
Stockholders
|
|
Shares
|
Amount
|
Capital
|
Deficit
|
Deficit
|
|
|
|
|
|
|
Balance at January 1, 2019
|
539,141
|
$
|
5
|
$
|
7,984,920
|
$
|
(8,625,412)
|
$
|
(640,487)
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
-
|
|
-
|
|
-
|
|
(90,848)
|
|
(90,848)
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2019
|
539,141
|
$
|
5
|
$
|
7,984,920
|
$
|
(8,716,260)
|
$
|
(731,335)
|
|
Preferred Stock
|
|
Shares
|
Amount
|
Balance at January 1, 2020
|
51
|
$ -
|
|
|
|
|
-
|
-
|
|
|
|
Balance at March 31, 2020
|
51
|
$ -
|
|
Preferred Stock
|
|
Shares
|
Amount
|
Balance at January 1, 2019
|
51
|
$ -
|
|
|
|
|
-
|
-
|
|
|
|
Balance at March 31, 2019
|
51
|
$ -
|
The accompanying notes are an integral part of these consolidated financial statements.
F-27
BERGIO INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
Three Months Ended March 31,
|
|
2020
|
|
2019
|
Operating activities:
|
|
|
|
Net loss
|
$
|
(1,470,901)
|
|
$
|
(90,848)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
8,425
|
|
|
26,609
|
Amortization of deferred financing costs
|
|
6,755
|
|
|
-
|
Amortization of debt discount
|
|
52,979
|
|
|
-
|
Change in fair value of derivative liabilities
|
|
1,213,382
|
|
|
-
|
Issuance of stock for services
|
|
148,000
|
|
|
-
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Decrease in accounts receivable
|
|
7,821
|
|
|
13,756
|
(Increase) in inventory
|
|
(22,835)
|
|
|
(5,605)
|
(Increase) prepaid expenses
|
|
(28,120)
|
|
|
-
|
Increase in deferred compensation
|
|
25,000
|
|
|
25,000
|
Increase in accounts payable and accrued liabilities
|
|
48,284
|
|
|
23,028
|
Net cash used in operating activities
|
|
(11,210)
|
|
|
(8,060)
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
Capital expenditures
|
|
-
|
|
|
(3,100)
|
Net used in investing activities
|
|
-
|
|
|
(3,100)
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
Proceeds from loans
|
|
-
|
|
|
7,260
|
Advances from Principal Executive Officer, net
|
|
(11,580)
|
|
|
3,900
|
Net (used in) provided by financing activities
|
|
(11,580)
|
|
|
11,160
|
|
|
|
|
|
|
Net change in cash
|
|
(22,790)
|
|
|
-0-
|
|
|
|
|
|
|
Cash - beginning of periods
|
|
22,790
|
|
|
-0-
|
|
|
|
|
|
|
Cash - end of periods
|
$
|
-0-
|
|
$
|
-0-
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
Cash paid for interest
|
$
|
-
|
|
$
|
-
|
Cash paid for income taxes
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
|
|
Issuance of common stock for convertible debt and accrued interest
|
$
|
23,100
|
|
$
|
16,640
|
The accompanying notes are an integral part of these consolidated financial statements.
F-28
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1 - Nature of Operations and Basis of Presentation
Organization and Nature of Operations
Bergio International, Inc. (the Company) was incorporated in the State of Delaware on July 24, 2007 under the name Alba Mineral Exploration, Inc. On October 21, 2009, as a result of a Share Exchange Agreement, the corporations name was changed to Bergio International, Inc. On February 19, 2020, the Company changed its state of incorporation to Wyoming. The Company is engaged in the product design, manufacturing, distribution of fine jewelry primarily in the United States and is headquartered in Fairfield, New Jersey. The Companys intent is to take advantage of the Bergio brand and establish a chain of retail stores worldwide. Our branded product lines are products and/or collections designed by our designer and CEO Berge Abajian and will be the centerpiece of our retail stores.
In September 2019, Bergio International, Inc. filed a Certificate of Amendment to the Certificate of Incorporation to effectuate a 1-for-10,000 reverse stock split of the Companys common stock. All share and per share data has been adjusted to reflect such stock split.
Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary consisting of normal recurring adjustments to present fairly the financial position of the Company as of March 31, 2020, the results of operations for the three months ended March 31, 2020 and 2019, and statements of cash flows for the three months ended March 31, 2020 and 2019. These results are not necessarily indicative of the results to be expected for the full year. The financial statements have been prepared in accordance with the requirements of Form 10-Q and consequently do not include disclosures normally made in an Annual Report on Form 10-K. The December 31, 2019 balance sheet included herein was derived from the audited financial statements included in the Companys Annual Report on Form 10-K as of that date. Accordingly, the financial statements included herein should be reviewed in conjunction with the financial statements and notes thereto included in the Companys Annual Report on Form 10-K/A for the fiscal year ended December 31, 2019, as filed with the Securities and Exchange Commission (SEC) on May 15, 2020 (the Annual Report).
Impact of the COVID-19 Coronavirus
In December 2019, a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China. Since then, COVID-19 coronavirus has spread globally. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and the U.S. government imposed travel restrictions on travel between the United States, Europe and certain other countries. The COVID-19 pandemic has significantly negatively affected the global economy, significantly disrupted global supply chains, and created significant disruption of the financial and retail markets, including a significant disruption in consumer demand jewelry and accessories. As such, the comparability of the Company's operating results has been affected by significant adverse impacts related to the COVID-19 pandemic.
The Company has increased its online presence to minimize the impact of having to close its retail stores.
Note 2 - Going Concern
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.
F-29
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 2 - Going Concern (continued)
The Company has suffered recurring losses, and has an accumulated deficit of $13,131,356 as of March 31, 2020. As of March 31, 2020, the Company had $562,495 in convertible debentures. At March 31, 2020, the Company also had a stockholders deficit of $1,912,517. These factors raise substantial doubt about the Company's ability to continue as a going concern. The recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which in turn, is dependent upon the Company's ability to raise capital and/or generate positive cash flows from operations.
It is our intention to establish Bergio as a holding company for the purpose of establishing retails stores worldwide. Our branded product lines are products and/or collections designed by our designer and CEO Berge Abajian and will be the centerpiece of our retail stores. We also intend to complement our own quality-designed jewelry with other products and our own specially-designed handbags. This is in line with our strategy and belief that a brand name can create an association with innovation, design and quality which helps add value to the individual products as well as facilitate the introduction of new products. It is our intention to open elegant stores in high-end areas and provide excellent service in our stores which will be staffed with knowledgeable professionals. We also intend to sell our products on a wholesale basis to limited customers.
These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
Note 3 - Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, and include the Company and its wholly-owned subsidiary. All significant inter-company accounts and transactions have been eliminated.
During the three months ended March 31, 2020, there have been no other material changes in the Companys significant accounting policies to those previously disclosed in the Companys Annual Report.
The Company evaluated subsequent events, which are events or transactions that occurred after March 31, 2020 through the issuance of the accompanying financial statements.
Note 4 - Net Loss per Share
Basic earnings (loss) per share includes no dilution and is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive earnings per share reflect the potential dilution of securities that could occur through the effect of common shares issuable upon the exercise of stock options, warrants and convertible securities. Basic net loss per share equaled the diluted loss per share for the three months ended March 31, 2020 and 2019, since the effect of shares potentially issuable upon the exercise or conversion was anti-dilutive. Equity instruments that may dilute earnings per share in the future are listed in Note 7 below. For the three months ended March 31, 2020, 31,768,560 shares issuable upon the exercise of warrants and conversion of convertible debt were not included in the computation of diluted net loss because their inclusion would be anti-dilutive. For the three months ended March 31, 2019, 616,288 shares issuable upon the conversion of convertible debt were not included in the computation of diluted net loss because their inclusion would be anti-dilutive. In September 2019, Bergio International, Inc. filed a Certificate of Amendment to the Certificate of Incorporation to effectuate a 1-for-10,000 reverse stock split of the Companys common stock. All share and per share data has been adjusted to reflect such stock split.
F-30
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 4 - Net Loss per Share (continued)
The following table sets forth the computation of earnings per share:
|
Three Months Ended
|
|
March 31, 2020
|
|
March 31, 2019
|
Basic net loss per share computation:
|
|
|
|
Net loss
|
$
|
(1,470,901)
|
|
$
|
(90,848)
|
Weighted-average common shares outstanding
|
|
20,920,043
|
|
|
539,141
|
Basic net loss per share
|
$
|
(0.07)
|
|
$
|
(0.17)
|
|
|
|
|
|
|
Diluted net loss per share computation:
|
|
|
|
|
|
Net loss
|
$
|
(1,470,901)
|
|
$
|
(90,848)
|
Weighted-average common shares outstanding
|
|
20,920,043
|
|
|
539,141
|
Incremental shares attributable to the shares issuable upon conversion of convertible debt
|
|
-
|
|
|
-
|
Total adjusted weighted-average shares
|
|
20,920,043
|
|
|
539,141
|
Diluted net loss per share
|
$
|
(0.07)
|
|
$
|
(0.17)
|
Note 5 - New Authoritative Accounting Guidance
No other recently issued accounting pronouncements had or are expected to have a material impact on the Companys condensed consolidated financial statements.
Note 6 - Convertible Debt
Fife, Typenex and Iliad
In December 2012, the Company entered into a $325,000 convertible note with Fife consisting of three tranches to be drawn down with the first tranche totaling $125,000, including $25,000 in loan costs and additional two tranches totaling $200,000. The note bears a 5% annual interest rate and matures eighteen months from the date of issuance. The note is convertible into shares of the Companys common stock based on 70% of the average of the three lowest closing prices of the common stock for the proceeding 15 consecutive trading days immediately prior to the conversion. During 2013, the conversion price was fixed at $0.005 per share. As of December 31, 2012, the Company only drew down the first tranche totaling $125,000. On February 11, 2013, April 5, 2013, April 23, 2013, and July 1, 2013, the Company drew down an additional $250,000.
On June 5, 2014, the Company, Fife, Typenex and Iliad Research and Trading, LLP (Iliad) entered into an Assignment and Assumption Agreement and Note Purchase Agreement (the Note Purchase Agreement) whereby Iliad acquired all of Fifes and Typenexs right, title, obligations and interest in, to and arising under the Company Notes (as defined in the Note Purchase Agreement) and the Note Purchase Documents (as defined in the Note Purchase Agreement).
On October 17, 2014, the Company entered into a financing arrangement with Iliad to provi0de additional financing in the amount of up to $450,000 through the issuance of a Secured Convertible Promissory Note (the Note). The Company agreed to cover Iliads legal, accounting and other related fees in the amount of $5,000, which is included in the principal balance of the Note. The Note will accrue interest at the rate of 8% per annum until the Note is paid in full. Monies are to be drawn in eight tranches with the initial tranche in the amount of $105,000, and the remaining balance of $350,000 in seven tranches of $50,000 each. The Company drew down the initial tranche on October 17, 2014. The Note has a maturity date of July 17, 2016. The Company continues to negotiate with the lender.
F-31
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 6 - Convertible Debt (continued)
Beginning six months after October 17, 2014 and on the same day each month thereafter, the Company shall make an installment payment, based upon the unpaid balance. At the option of the Company, payments may be made in cash or by converting the installment amount into shares of the Companys common stock. The conversion price is equal to the lesser of (i) $0.0005 per share and (ii) 67.5% of the average of the three lowest closing bid prices in the 15 trading days immediately preceding the conversion. The Company has the right to prepay the Note at 135% of the outstanding balance at the time of prepayment. During the three months ended March 31, 2020, there were no conversions. The outstanding balances at March 31, 2020 and December 31, 2019 were $7,123 and $7,123, respectively with accrued interest of $201 and $54 at March 31, 2020 and December 31, 2019, respectively.
During the year ended December 31, 2014, the Company drew down an additional $314,703. During the three months ended March 31, 2020, there were no conversions. The outstanding balances at March 31, 2020 and December 31, 2019 were $329,175 and $329,175 respectively, with accrued interest of $151,101 and $141,487 at March 31, 2020 and December 31, 2019, respectively.
111 Recovery Corp. and Vis Vires Group, Inc.
On May 31, 2019, the Vis Vires Group, Inc. (Vis Vires) entered into an assignment agreement with 111 Recovery Corp. wherein Vis Vires assigned all of its rights, title and interests in, to and under the convertible notes (discussed below) to 111 Recovery Corp. from the inception of the notes, together with unpaid accrued interest on the convertible notes. The Company acknowledged and approved this assignment.
On March 11, 2015, the Company entered into an 8% convertible note in the amount of $38,000 with Vis Vires Group, Inc. The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before nine months from the date of issuance, the holder may elect to convert all or part of the convertible into the Companys common stock. The note is convertible into shares of the Companys common stock at a price equal to 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. During the three months ended March 31, 2020, principal of $23,100 was converted into 1,160,804 shares of common stock. The Company is currently in default, and interest accrues at the default interest rate of 22%. The outstanding balance at March 31, 2020 and December 31, 2019 was $14,900 and $38,000, respectively, with accrued interest of $17,589 and $20,411 at March 31, 2020 and December 31, 2019, respectively. The Company is currently negotiating an extension to this note.
On April 30, 2015, the Company entered into an 8% convertible note in the amount of $33,000 with Vis Vires. The principal and accrued interest is payable on or before November 6, 2015. At the option of the Company, but not before nine months from the date of issuance, the holder may elect to convert all or part of the convertible into the Companys common stock. The note is convertible into shares of the Companys common stock at a price equal to 60% of the average of the three lowest trading prices during the 10 days prior to the date of conversion or $0.00009, whichever is greater. During the nine months ended March 31, 2020, there were no conversions. The Company is currently in default, and interest accrues at the default interest rate of 22%. The outstanding balance at March 31, 2020 and December 31, 2019 was $33,000 with accrued interest of $30,344 and $31,953 at March 31, 2020 and December 31, 2019, respectively. The Company is currently negotiating an extension to this note.
F-32
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 6 - Convertible Debt (continued)
Sims Investment Holdings, Inc.
During 2018, the Company received $125,000 in the form of a note payable. On July 1, 2019 (Maturity Date), the amount was converted into a 10% convertible promissory note. The principal and accrued interest from the original notes payable become due on July 1, 2019. The note accrues interest on the unpaid principal balance at the rate of 10% per annum from the date hereof (the Issue Date) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of 10% per annum from the due date until paid (Default Interest). Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed. The note is convertible into shares of the Companys common stock, at the option of the holder. The conversion price shall be $0.01 per common share. There were no conversions during the three months ended March 31, 2020. The Company is currently in default, and interest accrues at the default interest rate of 10%. The outstanding balances at March 31, 2020 and December 31, 2019 was $125,000 and $125,000, respectively, with accrued interest of $12,674 and $9,514 at March 31, 2020 and December 31, 2019, respectively.
Auctus Funds, LLC.
On November 6, 2019, the Company entered into a 12% convertible promissory note in the amount of $125,000 with Auctus Fund, LLC. The principal and accrued interest is payable on or before August 20, 2020 and interest accrues at the rate of 12% per annum. Interest shall be computed on the basis of a 365 day year and the actual number of days elapsed. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of the lesser of (i) twenty-four percent (24%) per annum and (ii) the maximum amount permitted under law from the due date thereof until the same is paid (the Default Interest). The Holder shall have the right from time to time to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under this note into fully paid and non-assessable shares of common stock.
The conversion price shall equal the lesser of: (i) the lowest trading price during the previous twenty-five (25) trading day period ending on the latest complete trading day prior to the date of this Note, and (ii) the variable conversion which shall mean 60% multiplied by the lowest trading price for the common stock during the twenty-five (25) trading day period ending on the latest complete trading day prior to the conversion date. Furthermore, the conversion price may be adjusted downward if, within three (3) business days of the transmittal of the notice of conversion to the Borrower or Borrowers transfer agent, the Common Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion.
During the three months ended March 31, 2020, there were no conversions. The outstanding balances at March 31, 2020 and December 31, 2019 were $125,000 and $125,000, respectively, with accrued interest of $6,083 and $1,910 at March 31, 2020 and December 31, 2019, respectively.
Crown Bridge Partners Inc.
On October 29, 2019, the Company entered into a 10% convertible promissory note in the amount of $100,000 with Crown Bridge Partners, LLC. This Note carries a prorated original issue discount of up to $8,000.00 to cover the Holders accounting fees, due diligence fees, monitoring, and/or other transactional costs incurred in connection with the purchase and sale of the note, which is included in the principal balance of this note. The holder paid $23,000 for the first tranche ($25,000 less $2,000 discount). The maturity date for each tranche funded shall be twelve (12) months from the effective date of each payment as well as any accrued and unpaid interest and other fees. Interest accrues at the rate of 10% per annum, and shall be computed on the basis of a 365 day year and the actual number of days elapsed. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate the of lesser of (i) 15% per annum and (ii) the maximum amount permitted under law from the due date thereof until the same is paid (the Default Interest). The Holder shall have the right from time to time to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under this note into fully paid and non-assessable shares of common stock.
F-33
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 6 - Convertible Debt (continued)
The conversion price shall mean 60% multiplied by the lowest trading price (representing a discount rate of 40%) during the previous twenty-five (25) trading day period ending on the latest complete trading day prior to the date of this note. The conversion price shall be subject to a floor price of $0.000035.
During the three months ended March 31, 2020, there were no conversions. The outstanding balances at March 31, 2020 and December 31, 2019 were $25,000 and $25,000, respectively, with accrued interest of $1,069 and $438 at March 31, 2020 and December 31, 2019, respectively.
Fidelis Capital, LLC.
On November 5, 2019, the Company entered into a 10% convertible promissory note in the amount of $30,000 with Fidelity Capital, LLC. The principal and accrued interest is payable on or before November 5, 2020 and interest accrues at the rate of 10% per annum. If the borrower fails to pay the default amount within five (5) business days of written notice that such amount is due and payable, then the holder shall have the right at any time (and so long and to the extent that there are sufficient authorized shares), to require the borrower, upon written notice, to immediately issue, in lieu of the default amount, the number of shares of common stock of the borrower equal to the default amount divided by the conversion price then in effect.
The Holder shall have the right from time to time to convert all or any part of the outstanding and unpaid principal, interest, penalties, and all other amounts under this note into fully paid and non-assessable shares of common stock. The conversion price shall mean a price which is a 40% discount to the lowest trading price in the fifteen (15) days prior to the day that the Holder requests conversion.
During the three months ended March 31, 2020, there were no conversions. The outstanding balances at March 31, 2020 and December 31, 2019 were $30,000 and $30,000, respectively, with accrued interest of $1,225 and $467 at March 31, 2020 and December 31, 2019, respectively.
As of March 31, 2020 and December 31, 2019, total convertible debt was $562,495 and $532,616, respectively, net of debt discount of $126,703 and $179,682 at March 31, 2020 and December 31, 2019, respectively. Total accrued interest was $220,286 and $206,234 March 31, 2020 and December 31, 2019, respectively.
Note 7. Derivative Liability
The Company accounts for the fair value of the conversion features of its convertible debt in accordance with ASC Topic No. 815-15 Derivatives and Hedging; Embedded Derivatives (Topic No. 815-15). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Companys convertible debt. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component of results of operations. The Company values the embedded derivatives using the Black-Scholes pricing model. During the year ended December 31, 2019, the Company recorded debt discount in the amount of $337,496. Amortization of debt discount amounted to $52,978 and $-0- for the three months ended March 31, 2020 and 2019, respectively. Unamortized debt discount at March 31, 2020 and December 31, 2019 were $126,703 and $179,682, respectively. The derivative liability is revalued each reporting period using the Black-Scholes model. As of March 31, 2020 and December 31, 2019, the derivative liability was $1,609,602 and $396,220, respectively.
The Black-Scholes model utilized the following inputs to value the derivative liability at the date of issuance of the convertible note at March 31, 2020:
Stock Price - The stock price was based closing price of the Companys stock as of the valuation date, which was $0.185 at March 31, 2020.
F-34
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 7. Derivative Liability (continued)
Variable Conversion Prices - The conversion price was based on: (i) 40% discount to the lowest trading price in the fifteen (15) days prior to the conversion at March 31, 2020 for Fidelis Capital; (ii) 60% multiplied by the lowest trading price during the previous twenty-five (25) trading day period prior to the conversion at March 31, 2020 for Crown Bridge Partners; (iii) the lesser of: (a) the lowest trading price during the previous twenty-five (25) trading day period ending on the latest complete trading day prior to the date of this Note, and (b) the variable conversion which shall mean 60% multiplied by the lowest trading price for the common stock during the twenty-five (25) trading day period ending on the latest complete trading day prior to the conversion at March 31, 2020 for Auctus Fund, LLC.
Time to Maturity - The time to maturity was determined based on the length of time between the valuation date and the maturity of the debt. Time to maturity ranged from 211-2192 to 310 days at March 31, 2020.
Risk Free Rate - The risk free rate was based on the Treasury Note rate as of the valuation dates with a term commensurate with the remaining term of the debt. The risk free rate at March 31, 2020 was 0.17%, based on the term of the note.
Volatility - The volatility was based on the historical volatility of the Company. The average volatility was 611.44% at March 31, 2020.
Note 8 - Advances from Principal Executive Officer and Accrued Interest
The Company also receives periodic advances from its principal executive officer based upon the Companys cash flow needs. At March 31, 2020 and December 31, 2019 $374,137 and $383,717, respectively, was due to such officer, including accrued interest. During the year ended December 31, 2019, the principal executive officer converted $500,000 of deferred compensation for common stock of the Company. As such, as of March 31, 2020 deferred compensation of $295,173 and advances of $204,827 and at December 31, 2019, deferred compensation of $297,513 and advances of $202,487 of the advances, both periods totaling $500,000, were classified as long-term liabilities.
Interest expense is accrued at an average annual market rate of interest which was 3.25% and 4.75% at March 31, 2020 and December 31, 2019, respectively. Interest expense due to such officer was $2,341 and $15,491 for the three months ended March 31, 2020 and 2019, respectively. Accrued interest was $204,827 and $202,487 at March 31, 2020 and December 31, 2019, respectively. No terms for repayment have been established.
Effective February 28, 2010, the Company entered into an employment agreement with its CEO. The agreement, which is for a five year term, provides for an initial base salary of $175,000 per year with a 3% annual increase thereafter (the Base Salary). The CEO is also entitled to certain bonuses based on net profits before taxes and other customary benefits, as defined in the agreement. In addition, since it is understood that the Company is employing the CEO during a time of economic decline throughout the U.S. and at times and from time to time, the Company may not be in a position to pay the full amount of Base Salary owed the CEO it is understood and agreed to by the Board, that as long as the Company is unable to pay the CEO the full amount of his Base Salary that the Board shall issue to him, from time to time, an amount of shares that will allow him to remain in possession of fifty-one percent (51%) of the Companys then outstanding shares of common stock. Such issuances shall be made to the CEO at any time when his total share holdings are reduced to an amount less than fifty-one percent (51%) as a result of issuance of shares of common stock made on behalf of the Company.
F-35
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 8 - Advances from Principal Executive Officer and Accrued Interest (continued)
Effective September 1, 2011, the Company and CEO entered into an Amended and Restated Employment Agreement (the Amended Agreement) which primarily retains the term and compensation of the original agreement. The Amended Agreement, however, removes the section which previously provided for the issuance of Company common stock to the CEO, from time to time, when the Company is unable to pay the CEO the full amount of his Base Salary (as defined in the Amended Agreement) which would allow the CEO to maintain a fifty-one percent (51%) share of the Companys outstanding common stock. However, the CEO does have the right to request all or a portion of his unpaid Base Salary be paid with the Companys restricted common stock. In addition, the Amended Agreement provides for the issuance of 51 shares of newly authorized Series A Preferred Stock to be issued to the CEO. As defined in the Certificate of Designations, Preferences and Rights of the Series A Preferred Stock, each share of Series A Preferred Stock has voting rights such that the holder of 51 shares of Series A Preferred Stock will effectively maintain majority voting control of the Company.
On September 30, 2018, the Principal Executive Office signed an agreement with the Company extending payments in the amount of $1,000,000 due him until January 31, 2020 as a result of the financial situation of the Company. This amount was reduced to $500,000 after the PEO converted $500,000 of deferred compensation into 17,000,000 shares of common stock of the Company. As of March 31, 2020 and December 31, 2019, deferred compensation due to the PEO were $370,571 and $345,571, respectively. As of March 31, 2020 and December 31, 2019, $295,173 and $297,513, respectively, of these amounts were classified as a long-term liability.
On January 1, 2019, the CEO amended his employment agreement with the Company for a term of one year expiring December 31, 2019. The agreement primarily retains the terms of the Amended Agreement, but lowers the compensation to $100,000 for the year. Effective July 1, 2019, the Principal Executive Officer agreed to stop deferral of his salary at least through December 31, 2019 as a result of the financial situation of the Company as a result of the Companys financial condition. Effective January 1, 2020, the CEOs salary was restated back to $105,000.
Note 9 - Litigation
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
Note 10 - Operating Lease Liability
The Company leases retail space at two different locations. One lease has monthly payments from $1,350 to $1,665 which expire in May 2024. The second lease has a contingent rental based on 10% of sales. Contingent rentals are not included in operating lease liabilities. The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company used incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date. The Company estimated its incremental borrowing rate based on its credit quality, line of credit agreement and by comparing interest rates available in the market for similar borrowings. The Company used a discount rate of 10% at March 31, 2020.
The following table reconciles the undiscounted future minimum lease payments (displayed by year in aggregate) under non-cancelable operating leases with terms more than one year to the total operating lease liabilities on the consolidated balance sheet as of March 31, 2020:
F-36
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 10 - Operating Lease Liability (continued)
2020 remainder
|
$
|
13,215
|
2021
|
|
18,180
|
2022
|
|
18,900
|
2023
|
|
19,700
|
2024
|
|
6,660
|
Total minimum lease payments
|
|
76,655
|
Less amounts representing interest
|
|
(13,600)
|
Present value of net minimum lease payments
|
|
63,055
|
Less current portion
|
|
(12,302)
|
Long-term capital lease obligation
|
$
|
50,753
|
(1)The above amount does not include contingent rentals which may be paid under lease agreement with Ocean Resort Casino. This rental is based upon 10% of gross sales at this location.
Total rent expense under operating leases for the three months ended March 31, 2020 and 2019 was $10,352 and $14,954, respectively.
Note 10 - Reverse Stock Split
In September 2019, Bergio International, Inc. filed a Certificate of Amendment to the Certificate of Incorporation to effectuate a 1-for-10,000 reverse stock split of the Companys common stock. All share and per share data has been adjusted to reflect such stock split.
Note 11 - Subsequent Events
COVID-19
The Companys operations have been affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The ultimate disruption which may be caused by the outbreak is uncertain; however, it may result in a material adverse impact on the Companys financial position, operations and cash flows. Possible areas that may be affected include, but are not limited to, disruption to the Companys customers and revenue, labor workforce, inability of customers to pay outstanding accounts receivable due and owing to the Company as they limit or shut down their businesses, customers seeking relief or extended payment plans relating to accounts receivable due and owing to the Company, unavailability of products and supplies used in operations, and the decline in value of assets held by the Company, including property and equipment.
PPP Loan
On March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security (the CARES Act), which, among other things, outlines the provisions of the Paycheck Protection Program (the PPP). The Company determined that it met the criteria to be eligible to obtain a loan under the PPP because, among other reasons, in light of the COVID-19 outbreak and the uncertainty of economic conditions related thereto, the loan was considered necessary to support the Companys ongoing operations and retain all its employees. In addition, President Trump signed into law the Paycheck Protection Program and Health Care Enhancement Act on April 24, 2020, which increased funding provided by the CARES Act. On April 17, 2020 the Company issued a promissory note (the Note) to Columbia Bank in the principal aggregate amount of $18,607.50 (the PPP Loan) pursuant to the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). On June 5, 2020 the Paycheck Protection Program Flexibility Act was signed into law and extended the program until December 31, 2020.
F-37
BERGIO INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 11 - Subsequent Events (continued)
Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loan granted under the program. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. No assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part. The PPP Loan has a two-year term and bears interest at a rate of 0.98% per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. Based on the June 5, 2020 the Paycheck Protection Program Flexibility Act, certain changes will need to be made to the original Note, based on the new law.
F-38
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The Registrant estimates that expenses in connection with the distribution described in this Registration Statement will be as shown below. All expenses incurred with respect to the distribution will be paid by the Company.
Expense
|
|
|
|
|
|
|
|
Legal fees and expenses:
|
|
$
|
20,000
|
Accounting fees and expenses:
|
|
$
|
15,000
|
Total:
|
|
$
|
35,000
|
Item 14. Indemnification of Directors and Officers
See the Bylaws of the Company as shown on Exhibit 3.2 herein.
Agreements
We intend to modify the compensation agreements with selected officers and directors, pursuant to which we will agree, to the maximum extent permitted by law, to defend, indemnify and hold harmless the officers and directors against any costs, losses, claims, suits, proceedings, damages or liabilities to which our officers and directors become subject to which arise out of or are based upon or relate to our officers and directors engagement by the Company.
Recent Sales of Unregistered Securities
During the year ended December 31, 2019, we have issued the following securities which were not registered under the Securities Act and not previously disclosed in the Companys Quarterly Reports on From 10-Q or Current Reports on Form 8-K. Unless otherwise indicated, all of the share issuances described below were made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act for transactions not involving a public offering:
1)On October 19, 2019, we issued 17,000,000 shares of common stock valued at $2,890,000 to Berge Abajian, the Companys President and PEO, for conversion of deferred compensation.
2)On November 27, 2019, we issued 1,750,000 shares of common stock valued at $15,318 to Illiad for conversion of its convertible debt and accrued interest.
The issuances of the above securities were made in reliance upon exemptions from registration available under Section 4(a)(2) and Rule 144 of the Securities Act, among others, as transactions not involving a public offering. This exemption was claimed on the basis that these transactions did not involve any public offering and the purchasers in each offering were accredited or sophisticated and had sufficient access to the kind of information registration would provide. In each case, appropriate investment representations were obtained and certificates representing the securities were issued with restrictive legends.
II-1
Exhibits
The exhibits and financial statement schedules filed as part of this registration statement are as follows:
Exhibit No.
|
|
Description
|
|
|
|
2.1
|
|
Share Exchange Agreement, dated October 19, 2009, by and between Alba Mineral Exploration, Inc. and Diamond Information Institute, Inc. (as filed as Exhibit 2.1 to the Companys Current Report on Form 8-K, filed with the SEC on October 21, 2009)
|
|
|
|
2.2
|
|
Stock Purchase Agreement, dated October 20, 2009, by and among Alba Mineral Exploration, Inc., Owen Gibson, individually, Joan Gibson, individually, Darcy Brann, individually, Duane Schaffer, individually, Lindsay Devine, individually, and Dennis Rodowitz, individually (as filed as Exhibit 2.2 to the Companys Current Report on Form 8-K, filed with the SEC on October 21, 2009)
|
|
|
|
3.1
|
|
Articles of Incorporation, as amended (as filed as Exhibit 3.1 to the Companys Registration Statement on Form S-1/A, filed with the SEC on April 23, 2008)
|
|
|
|
3.2
|
|
Certificate of Amendment to the Articles of Incorporation (as filed as Exhibit 3.1 to the Companys Current Report on Form 8-K, filed with the SEC on October 22, 2009)
|
|
|
|
3.3
|
|
Bylaws, as amended (as filed as Exhibit 3.2 to the Companys Registration Statement on Form S-1/A, filed with the SEC on April 23, 2008)
|
|
|
|
3.4
|
|
Certificate of Designation of Preferences, Rights and Limitations of the Bergio International Inc. Series A Preferred Stock, as filed with the Delaware Secretary of State on September 2, 2011 (as filed as Exhibit 3.1 to the Companys Current Report on Form 8-K, filed with the SEC on September 8, 2011)
|
|
|
|
3.5
|
|
Certificate of Amendment of Certificate of Incorporation, dated November 29, 2012 (as filed as Exhibit 3.1 to the Companys Current Report on Form 8-K, filed with the SEC on December 12, 2012)
|
|
|
|
3.6
|
|
Certificate of Amendment of Certificate of Incorporation, dated January 14, 2014 (as filed as Exhibit 3.1 to the Companys Current Report on Form 8-K, filed with the SEC on January 30, 2014)
|
|
|
|
3.7
|
|
Certificate of Amendment of Certificate of Incorporation, dated February 26, 2014 (as filed as Exhibit 3.1 to the Companys Current Report on Form 8-K, filed with the SEC on March 3, 2014)
|
|
|
|
3.8
|
|
Certificate of Amendment of Certificate of Incorporation, dated April 3, 2014 (as filed as Exhibit 3.1 to the Companys Current Report on Form 8-K, filed with the SEC on April 8, 2014)
|
|
|
|
3.9
|
|
Certificate of Amendment of Certificate of Incorporation, dated October 14, 2014 (as filed as Exhibit 3.1 to the Companys Current Report on Form 8-K, filed with the SEC on October 16, 2014)
|
|
|
|
5.1
|
|
Consent of Stout Law Group, P.A.
|
|
|
|
10.1
|
|
Order Approving Stipulation for Settlement of Claim, dated February 4, 2010 (as filed as Exhibit 10.1 to the Companys Current Report on Form 8-K, filed with the SEC on February 5, 2010)
|
|
|
|
10.2
|
|
Amended and Restated Employment Agreement, dated September 1, 2011, by and between Bergio International Inc. and Berge Abajian, individually (as filed as Exhibit 10.1 to the Companys Current Report on Form 8-K, filed with the SEC on September 8, 2011)
|
II-2
Exhibit No.
|
|
Description
|
|
|
|
10.3
|
|
Bergio International, Inc. 2011 Stock Incentive and Reward Plan (as filed as Exhibit 10.1 to the Companys Registration Statement on Form S-8, filed with the SEC on May 10, 2011).
|
|
|
|
10.4
|
|
Committed Equity Facility Agreement, dated December 23, 2011, by and between Bergio International Inc. and TCA Global Credit Master Fund, LP (as filed as Exhibit 10.4 to the Companys Registration Statement on Form S-1, filed with the SEC on February 1, 2012)
|
|
|
|
10.5
|
|
Registration Rights Agreement, dated December 23, 2011, by and between Bergio International Inc. and TCA Global Credit Master Fund, LP (as filed as Exhibit 10.5 to the Companys Registration Statement on Form S-1, filed with the SEC on February 1, 2012)
|
|
|
|
10.6
|
|
First Amendment to Committed Equity Facility Agreement, dated October 18, 2012, by and between Bergio International Inc. and TCA Global Credit Master Fund, LP (as filed as Exhibit 10.1 to the Companys Current Report on Form 8-K, filed with the SEC on October 24, 2012)
|
|
|
|
10.7
|
|
8% Convertible Note with KBM Worldwide, Inc, dated February 4, 2015 (as filed as Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2015, filed with the SEC on May 13, 2015)
|
|
|
|
10.8
|
|
8% Convertible Note with Vis Vires Group, Inc., dated March 11, 2015 (as filed as Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2015, filed with the SEC on May 13, 2015)
|
|
|
|
10.9
|
|
8% Convertible Note with Vis Vires Group, Inc., dated April 30, 2015 (as filed as Exhibit 10.3 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2015, filed with the SEC on May 13, 2015)
|
|
|
|
10.10
|
|
8% Convertible Note with LG Capital Funding, LLC, dated May 4, 2015 (as filed as Exhibit 10.4 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2015, filed with the SEC on May 13, 2015)
|
|
|
|
10.11
|
|
Securities Purchase Agreement with KBM Worldwide, Inc., dated February 4, 2015 (as filed as Exhibit 10.5 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2015, filed with the SEC on May 13, 2015)
|
|
|
|
10.12
|
|
Securities Purchase Agreement with Vis Vires Group, Inc., dated March 11, 2015 (as filed as Exhibit 10.6 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2015, filed with the SEC on May 13, 2015)
|
|
|
|
10.13
|
|
Securities Purchase Agreement with Vis Vires Group, Inc., dated April 30, 2015 (as filed as Exhibit 10.7 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2015, filed with the SEC on May 13, 2015)
|
|
|
|
10.14
|
|
Securities Purchase Agreement with LG Capital Funding, LLC, dated May 4, 2015 (as filed as Exhibit 10.8 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2015, filed with the SEC on May 13, 2015)
|
|
|
|
II-3
Exhibit No.
|
|
Description
|
23.1
|
|
Consent of PCAOB Auditors BF Borgers CPA PC for 2019*
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23.2
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Consent of Tama Budaj and Raab, LLP for 2018*
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23.3
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Consent of Law Office of Stout Law Group, P.A. (included in Exhibit 5.1)
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101.INS
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XBRL Instance Document *
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101.SCH
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XBRL Taxonomy Extension Schema *
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase *
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase *
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101.LAB
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XBRL Taxonomy Extension Label Linkbase *
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase *
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* Initially filed with the Companys Form S-1 on July 22, 2020.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1)To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
i.To include any prospectus required by Section 10(a) (3) of the Securities Act;
ii.To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective Registration Statement;
iii.To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2)That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
(3)To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
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(4)That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5)For determining liability of the undersigned registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
i.Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (Sec. 230-424);
ii.Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the registrant;
iii.The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and iv. Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6)That, for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(7)That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof
(8)Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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